Pakistan's KSE-30 stock index muted ahead of IMF bailout decision, India's retaliation to escalation

Pakistan Stock Exchange rises 3% to record peak gain since December 2024

Pakistan's benchmark equity index KSE 30 is seeing muted gains on the Karachi Stock Exchange, after starting higher by 0.5 percent on May 9 compared to previous close, ahead of a crucial IMF decision on bailout funds, and India's retaliatory response to escalation along the western borders.

At intraday, the stock gained almost 3 percent, as its highest in this year so far.

There is a crucial meeting of the International Monetary Fund (IMF) in Washington on May 9 over its bailout package for Pakistan. New agency PTI has reported that India could communicate its view to the global financial body during the meeting of the IMF board. "I'm sure that our executive director will put forward India's position," Foreign Secretary Vikram Misri said at a media briefing on May 8.

"The decisions of the board are a different matter...But I think the case with regard to Pakistan should be self-evident to those people who generously open their pockets to bail out this country," Misri said, adding that many of the 24 bailout packages sanctioned by the IMF for Pakistan had not reached a successful conclusion.

Meanwhile, India's Army on May 9 confirmed overnight attempts at escalation along the western border through munition and drone strikes by the neighbouring country, which was repelled.

On May 8, Pakistan briefly paused trading at its stock market after index KSE-30 plunged 7.2 percent to extending losses for a second consecutive session. The Indian armed forces confirmed targetting defence installations in Lahore on May 8 in retaliation to Pakistan’s escalation, after carrying out precision strikes against several terror sites across the border under 'Operation Sindoor'.

Last year, Pakistan’s stock market delivered its highest return in 22 years, drawing renewed interest from global investors. Asset management giants such as BlackRock and Eaton Vance have increased their exposure to Pakistan’s $50 billion equity market, which has offered an impressive 84 percent return last year. The KSE-30 index has had a strong last one year, rising higher by over 33 percent.

Pakistan's recent stock market success was backed by a successful effort to secure an International Monetary Fund (IMF) bailout and improved macroeconomic indicators.